Correct localization of the centromeric histone variant CenH3/CENP-A/Cse4 is an important part of faithful chromosome segregation. Mislocalization of CenH3 could affect chromosome segregation, DNA replication and transcription. CENP-A is often overexpressed and mislocalized in cancer genomes, but the underlying mechanisms are not understood. One major regulator of Cse4 deposition is Psh1, an E3 ubiquitin ligase that controls levels of Cse4 to prevent deposition into non-centromeric regions. We present evidence that Chromatin assembly factor-1 (CAF-1), an evolutionarily conserved histone H3/H4 chaperone with subunits shown previously to interact with CenH3 in flies and human cells, regulates Cse4 deposition in budding yeast. yCAF-1 interacts with Cse4 and can assemble Cse4 nucleosomes in vitro. Loss of yCAF-1 dramatically reduces the amount of Cse4 deposited into chromatin genome-wide when Cse4 is overexpressed. The incorporation of Cse4 genome-wide may have multifactorial effects on growth and gene expression. Loss of yCAF-1 can rescue growth defects and some changes in gene expression associated with Cse4 deposition that occur in the absence of Psh1-mediated proteolysis. Incorporation of Cse4 into promoter nucleosomes at transcriptionally active genes depends on yCAF-1. Overall our findings suggest CAF-1 can act as a CenH3 chaperone, regulating levels and incorporation of CenH3 in chromatin.